DOJ Eliminates Obama-Era ‘Slush Fund” Payouts to 3rd Party Advocates

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In a move sure to please conservatives who long complained that the Obama administration’s Department of Justice was guilty of serial overreach, Attorney General Jeff Sessions on Wednesday announced the closure of a program derided by its critics as a “slush fund” for liberal causes and projects.

A memo to the current heads of the various US Attorney’s offices around the country from Sessions said that the Department of Justice would no longer participate in settlement agreements that require the targets of potential criminal or civil charges to make a payment to a non-governmental third party other than a victim of crime or a person directly affected by alleged wrongdoing.

“The goals of any settlement are, first and foremost, to compensate victims, redress harm, or punish and deter unlawful conduct,” Sessions wrote. Except for a handful of narrow exceptions, he said, there would be no more third party payments resulting from settlements and plea deals.

The practice of directing funds to nonprofits with a mission somehow related to the harm done by the accused was adopted under the Obama administration. The practice resulted in millions of dollars being funneled to social service agencies and advocacy groups especially when it came to settlements with large financial institutions.

The practice was abhorred by conservative organizations who objected on at least two grounds. The first is that soliciting contributions to third-party groups is not a core function of the Department of Justice. The second is that, in practice, the bulk of the donations went to groups perceived as having a liberal or anti-business bias.

Resentment about how the funds were distributed was plain in a statement released to the media.

“When the federal government settles a case against a corporate wrongdoer, any settlement funds should go first to the victims and then to the American people— not to bankroll third-party special interest groups or the political friends of whoever is in power,” Sessions said.

“Unfortunately, in recent years the Department of Justice has sometimes required or encouraged defendants to make these payments to third parties as a condition of settlement. With this directive, we are ending this practice and ensuring that settlement funds are only used to compensate victims, redress harm, and punish and deter unlawful conduct.”

The decision was welcomed by conservative media outlets, even those that have been reluctant to embrace much of the Trump administration’s agenda.

Under a headline that read, ‘Good Riddance to the Obama DOJ’s Scandalous Settlement ‘Slush Fund’ Policy,” National Review writer Ian Tuttle praised the decision, but called for a final solution.

He wrote, “The Justice Department’s decision to end this dubious Obama-era practice is a good one, but Congress should pass this legislation nonetheless — to protect its Article I prerogatives and to preempt an effort by a future administration to reinstate this scandalous policy.”

A longtime reporter on the intersection of the federal government and the private sector, Rob Garver served as a National Correspondent, based in Washington, D.C., for four years. He has written for ProPublica, The New York Times and other publications.